Commerce Provides Poor Excuse in First Substantive Answer on Secrecy of 232 Auto Tariff Report

Washington, D.C. (June 19, 2019) – After nearly four months, Cause of Action Institute (CoA Institute) has finally received an explanation from the Department of Commerce (Commerce) that claims the Commerce Secretary’s final report to the President regarding the Section 232 investigation into the national security impacts of the Administration’s proposed automobile tariffs may constitute a presidential record. In this determination, which is in response to CoA Institute’s Freedom of Information Act (FOIA) request and subsequent litigation, Commerce states it is reviewing whether the report does in fact constitute a presidential record, which would remove it from the scope of the FOIA. It also claims that if the report ultimately is classified as an “agency record,” Commerce will still refuse to provide access to the report under the guise of presidential communications or deliberate process privileges.

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District Court Denies FBI’s Open America Motion in Daily Caller News Foundation FOIA Lawsuit

Washington, D.C. (June 12 2019) – Cause of Action Institute (CoA Institute), celebrated a victory for its client, the Daily Caller News Foundation (DCNF), after the U.S District Court for the District of Columbia denied the Federal Bureau of Investigation’s (FBI) motion for an Open America stay. The victory for DCNF will ensure the FBI produces court ordered records, 500 records per month, pertaining to DCNF’s Freedom of Information Act (FOIA) request for documents relating to Special Government Employee Daniel Richman. The Court largely echoed the arguments made by CoA Institute that the FBI failed to show any unexpected spike in FOIA requests or litigation and had not properly reduced its FOIA backlog.

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CoA Institute Sues 14 Federal Agencies in Ongoing FOIA Investigation

Washington, D.C. (May 23, 2019) – Today, Cause of Action Institute (CoA Institute), a government watchdog organization, filed a lawsuit against 14 federal agencies seeking access to records concerning government-wide implementation of the Freedom of Information Act’s (FOIA) “foreseeable harm” standard. In October 2018, CoA Institute sent FOIA requests to 25 federal agencies as part of an investigation into the Administration’s implementation of this provision. The 14 agencies named in the lawsuit failed to provide timely determinations to the organization’s requests.

Ryan Mulvey, counsel at Cause of Action Institute:

“The failure of these 14 federal agencies to adhere to FOIA’s required timeline for response is unacceptable. For nearly seven months, we have waited for information concerning the agencies’ adherence to FOIA and diligence in implementing important amendments passed by Congress in 2016. The FOIA process is an integral vehicle for government accountability but it is only effective when government meets its statutory obligations. CoA Institute is committed to holding the government accountable and will continue to pursue these important records concerning fair administration of the FOIA.”

Background

The FOIA Improvement Act of 2016 included a “foreseeable harm” provision designed to ensure that federal agencies only withhold requested records when they “reasonably foresee” that disclosure would harm an interest protected by a statutory exemption. This “foreseeable harm” standard builds upon the so-called “presumption of openness,” which was introduced on a discretionary basis by the Obama White House and requires agencies to go beyond mere formulaic justifications for redacting records.

The Department of Justice Office of Information Policy (OIP) is tasked with providing guidance to the rest of the Executive Branch on the proper administration of the FOIA. After it failed to publish any government-wide directives on the proper interpretation and implementation of the “foreseeable harm” standard, CoA Institute opened an investigation into the administration of the FOIA and the “foreseeable harm” standard of 25 federal agencies. Fourteen of those agencies failed to issue a final determination in response to the requests within the statutorily required period, thus prompting CoA Institute to file a lawsuit to ensure the production of agency records.

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Media Contact: Matt Frendewey, matt.frendewey@causeofaction.org | 202-699-2018

About Cause of Action Institute

Cause of Action Institute is a 501(c)(3) non-profit working to enhance individual and economic liberty by limiting the power of the administrative state to make decisions that are contrary to freedom and prosperity by advocating for a transparent and accountable government free from abuse.

Techdirt Sues ICE for Records Relating to Seizures of Website Domains

Washington, D.C. (May 23, 2019) – Cause of Action Institute (CoA Institute) today, on behalf of Floor64 and Techdirt, a media outlet that reports on technology, filed a complaint against U.S. Immigration and Customs Enforcement (ICE) seeking records responsive to a FOIA request regarding ICE’s “Operation In Our Sites.” The government failed to provide any responsive records to Techdirt’s FOIA request – leaving them with no recourse but to sue the government.

Techdirt requested information about “Operation In Our Sites,” after the agency issued a press release touting its efforts to work with “high-profile industry representatives and anti-counterfeiting associations” to seize 1 million website domains. There are general concerns the sites, while allegedly offered counterfeit or copyrighted material, were seized without due process, and that federal law enforcement agents relied on industry representatives to identify the alleged website domains – raising the concern of actual or the appearance of cronyism.

James Valvo, counsel and senior policy advisor at CoA Institute, issued the following statement:

“This lawsuit and its underlying issues are why transparency and FOIA are so important. One million website domains were seized in partnership with corporate industry representatives, and the public deserves to know which sites were seized, the process by which they were taken to ensure due process, and the level of involvement corporate interests had on targeting sites to ensure the process was free of cronyism. These answers could be cleared up quickly if the government had responded properly to our client’s FOIA and produced responsive records.”

Techdirt is a news site, operated by Michael Masnick and Floor64, that relies on a proven economic framework to analyze and offer insight into news stories about changes in government policy, technology, and legal issues that affect companies’ ability to innovate and grow.

Michael Masnick, founder of Floor64 and editor of Techdirt, issued the following statement:

“At Techdirt, we’ve been following ICE’s questionable website seizures, based solely on input from a few corporations, for years — including the fact that it has had to quietly return many of the domains it improperly seized. It is quite worrisome that after those past mistakes, ICE has now chosen to completely hide the ball and ignore lawful FOIA requests to avoid scrutiny of its process for censoring websites.”

Background

In November 2018, ICE issued a press release touting its enforcement efforts in “Operation In Our Sites,” a global operation aiming to combat copyright-infringement, announcing the seizure of more than one million website domains through “combined efforts of law-enforcement agencies across the world, high-profile industry representatives and anti-counterfeiting associations.”

In response, Mr. Masnick of Techdirt submitted a FOIA request to the agency seeking access to the information ICE advertised in their release: a list of the domains seized, court filings relating to the seized domains, and email communications with the high-profile industry representatives and anti-counterfeiting associations mentioned.

ICE issued a determination in February 2019, stating that it had found no responsive records to Techdirt’s request. After a successful appeal, the FOIA request was remanded to the ICE FOIA Office, but the agency has failed to produce responsive records.

Complaint, Floor64 v. U.S. Immigration and Customs Enforcement

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Media ContactMatt Frendewey, matt.frendewey@causeofaction.org | 202-699-2018

CoA urges release of secret 232 auto report in response to POTUS proclamation

CoA urges release of secret 232 auto report in response to POTUS proclamation

Washington, D.C. (May 17, 2019) – In response to the President’s proclamation concerning auto tariffs, Cause of Action Institute (CoA Institute), a nonpartisan government watchdog organization, urged the release of the Department of Commerce’s Section 232 auto tariff report. CoA Institute filed a freedom of information request for the report when it was finalized, and later sued the administration for failing to respond to the FOIA and release the report.

The President’s proclamation responded to the U.S. Department of Commerce Secretary’s final report regarding the Section 232 investigation into the national security impact of the import of foreign automobile and automobile parts.

James Valvo, counsel and senior policy advisor at Cause of Action Institute:

“Today’s proclamation by the President, summarizing the Department of Commerce’s Section 232 auto report, serves as the latest reminder that the public deserves to see this report, and we urge its immediate release. The report was paid for by taxpayers and its recommendations could harm American consumers and businesses. The public should not be kept in the dark about findings in a secret report, and that’s why Cause of Action Institute continues to fight for its release to ensure a robust debate on the merits.”

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Media ContactMatt Frendewey, matt.frendewey@causeofaction.org | 202-699-2018

Small business owners prevail, Court denies all damages sought by FTC

WASHINGTON D.C. (May 10, 2019) – In a major victory, Cause of Action Institute (CoA Institute) today, celebrated the decision by the U.S. District Court Middle District of Florida denying all damages against its client, small business owners Robert and Angelo Cupo and their business Vylah Tec LLC. In January 2019, the Court found Messrs. Cupo and Vylah Tec liable, however the Court denied all financial damages, decrying the government’s failure to support its demand and writing in its opinion, “[a]s this Court stated in trial, it is obvious that the disgorgement (financial penalty) total is a moving target.” The decision repeatedly chided the government for continually changing both the total damages sought and the basis for the calculations – both of these “moving targets” make it impossible for small business owners like the Cupos to defend. Today’s decision is a major blow to the Federal Trade Commission’s (FTC), which had sought millions of dollars from the small business.

“Today’s decision serves as a rebuke to the Federal Trade Commission’s attempt to confiscate a small business owners’ property while completely ignoring the legal standards required to do so.” said John Vecchione, president and CEO of Cause of Action Institute. “While the Cupos and Vylah Tec may be the named parties, this victory should be celebrated by all small business owners and entrepreneurs who fear the Federal Trade Commission’s wrath, which too often treats small businesses more harshly than larger corporations, and by all supporters of the rule of law.”

Case background

After obtaining a secret court order in early 2017, the FTC targeted, Vylah Tec, LLC, a small family-run tech company and conducted an hours-long raid of the company’s headquarters on suspicion of “deceptive” sales practices because it bore a superficial resemblance to companies with illegitimate practices. The raid was initiated as part of a politically-hyped campaign known as Operation Tech Trap headed by the FTC in conjunction with the Florida Attorney General’s office. Failing to take into account Vylah Tec’s substantial well-regarded services, the government sought to shut the company down, depriving thousands of customers of pre-paid technical support services.

Not only did the FTC demand a freeze of assets of the defendants, but it also went so far as to demand a freeze of the jointly held marital assets of the wife of one of the defendants. After the 11th Circuit Court of Appeals reversed this freeze, the FTC filed a new motion to recapture the same personal assets without the evidence needed in equity. The Court strongly rebuked the motion. In September, the government prevailed in finding Messrs Cupo and V-Tec liable for damages. However, as the Court found today, the government was unable to prove these damages.

The Vylah Tec case demonstrates the vast power of the federal government and the ability of the FTC to use a court order obtained in secret to deny a family-run company due process by swooping in and seizing assets—including the money they needed to hire a lawyer and mount a defense. Cause of Action Institute firmly believes a prosperous society allows all individuals, entrepreneurs, and companies an opportunity to succeed, but far too often when facing the FTC, companies or individuals have their livelihoods threatened and must defend themselves against a regulatory authority with near endless resources and no motive to render justice.

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Media ContactMatt Frendewey, matt.frendewey@causeofaction.org | 202-699-2018

CoA Calls on IG to Investigate Use of Government Owned Vehicles at EXIM Bank

Cause of Action Institute (CoA Institute), a nonpartisan government watchdog organization, sent a letter today to the Office of Inspector General (OIG) at the Export–Import Bank of the United States (EXIM Bank), requesting the EXIM Bank’s Inspector General investigate the use of government owned vehicles by EXIM Bank staff based on documents uncovered by Cause of Action Institute through a freedom of information request. The newly released documents reveal troubling evidence of EXIM Bank staff abusing the use of government owned vehicles.

Kevin Schmidt, director of investigations at Cause of Action Institute issued the following statement:

“We’re calling on the EXIM Bank’s Office of Inspector General to launch an investigation into what appears to be ongoing abuse and use of government vehicles by Bank staff.

“As a result of our own independent investigation, we’ve discovered what appears to be unauthorized use of government vehicles by Bank staff, lack of details in automobile use logs that are required under EXIM Bank policies, including staff leaving off the purpose for the use of government owned vehicles.

“As a financial institution with the power to hand out billions of dollars in federally subsidized and backed loans to corporations, all taxpayers should be concerned that the bank staff cannot seem to follow standard government automobile use protocols that are designed to prevent abuse and protect tax dollars.”

EXIM Bank’s OIG had previously investigated this matter in 2016, producing a report that included a detailed list of deficiencies by the Bank and Bank staffs’ use of government owned vehicles.

Letter and exhibits to the EXIM Bank’s Office of Inspector General

Questionable Vehicle Use

Ex-Im Vehicle Use Policy

2019.4.3 FOIA Request to Ex-Im Bank Vehicle Use